Consortium relief is a UK corporation tax mechanism that lets companies which jointly own another company share tax losses with it, in proportion to each owner’s stake, even though no single owner holds the 75% needed for standard group relief. It is governed by Part 5 of the Corporation Tax Act 2010, with an extension for carried-forward losses under Part 5A. Getting a claim through depends on three things: the ownership structure meeting the statutory tests, the ownership proportion being calculated correctly, and the paperwork landing inside the time limit.
When a Company Is Owned by a Consortium
A company is owned by a consortium when at least 75% of its ordinary share capital is beneficially owned by other companies, and each of those owning companies holds at least 5%.1HM Revenue & Customs. CTM80530 – Consortia: Group Relief: Meaning of Members of the Consortium and Company Owned by a Consortium If any single owner holds 75% or more, the company is that owner’s 75% subsidiary and standard group relief applies instead; consortium relief is not available.
Ordinary share capital covers all issued share capital except shares that carry only a right to a fixed-rate dividend with no other profit participation.2Legislation.gov.uk. Corporation Tax Act 2010 Section 1119 Fixed-rate preference shares are excluded; anything with variable dividend rights is counted.
The structure typically shows up in joint ventures where several unrelated companies co-invest in one trading vehicle. That vehicle is the consortium company, and each investor holding at least 5% is a consortium member.
Who Can Claim and Surrender
Both the company giving up the loss and the company claiming it must be within the charge to UK corporation tax. A non-resident company can only participate where it trades in the UK through a permanent establishment and the losses relate to that establishment.
The consortium company itself must be either a trading company or the holding company of a trading company. Where it is a holding company, it must directly and beneficially own at least 90% of the trading subsidiary’s ordinary share capital, and that 90% subsidiary must not be a 75% subsidiary of anyone other than the holding company.3HM Revenue & Customs. CTM80535 – Consortia: Group Relief: 90% Subsidiary
The qualifying relationship has to hold throughout the overlapping period, meaning the window in which both companies’ accounting periods run at the same time and the consortium structure is in place. If it begins or ends part-way through an accounting period, profits and losses are time-apportioned to that window.
Losses That Can Be Surrendered
The categories are the same as under standard group relief. Section 99 of the Corporation Tax Act 2010 lists them:4Legislation.gov.uk. Corporation Tax Act 2010 Part 5
- Trading losses for the accounting period.
- Capital allowances that exceed taxable trading income.
- Non-trading loan relationship deficits.
- Qualifying charitable donations exceeding profits.
- UK property business losses.
- Management expenses of an investment business that exceed income.
- Non-trading losses on intangible fixed assets.
The surrendering company can only give up amounts arising in the current accounting period, and no more than it actually has. In practice the ownership proportion cap, explained next, usually bites first.
Calculating the Ownership Proportion
How much relief a member can take turns on its ownership proportion. That is not simply the shareholding percentage. It is the lowest of four separate measures:5Legislation.gov.uk. Corporation Tax Act 2010 Section 143
- The share of the consortium company’s ordinary share capital beneficially owned by the member.
- The share of distributable profits to which the member is entitled.
- The share of assets the member would receive on a winding-up.
- The share of votes directly held by the member at a general meeting.
The statute uses whichever figure is lowest. If a member holds 30% of the share capital but is only entitled to 20% of distributable profits, its ownership proportion is 20%. In a straightforward joint venture the four measures often align, but bespoke share classes can produce different figures for each. Where any of the proportions shifts during the overlapping period, the average across that period is used.6HM Revenue & Customs. CTM80545 – Amount of Relief: Claimant Is Company Owned by a Consortium
Applying the Cap
Once the ownership proportion is fixed, the maximum relief is the lower of:
- The ownership proportion multiplied by the surrendering company’s available loss for the overlapping period; and
- The claimant company’s total taxable profits for the same period.
A claim cannot create or increase a loss in the claimant’s hands. If the consortium company has a £400,000 trading loss and a member’s ownership proportion is 30%, the ceiling is £120,000. Where the member only has £80,000 of taxable profits, the claim is capped at £80,000. Where the member has £200,000 of profits, the claim is still capped at £120,000.
The calculation runs both ways. A consortium member surrendering its own losses to the consortium company is limited by its ownership proportion of the consortium company’s profits, applying the same four-measure test and the same lower-of-two-figures rule.
Matching Up Different Accounting Periods
Consortium members and the consortium company frequently have different year ends. The legislation identifies the overlapping period — the window in which both accounting periods are running and the consortium relationship is in place — and apportions profits and losses to that window on a time basis.7HM Revenue & Customs. CTM80210 – Group Relief: Non-Coinciding Accounting Periods or Group Relationships
Take a consortium company on a January-to-December year and a member on an April-to-March year. The overlap is April to December, nine months. A full-year loss of £600,000 apportions to £450,000 for the overlap, and the ownership proportion is then applied to that £450,000 figure.
HMRC will accept a different apportionment method if strict time-based splitting would produce an unjust or unreasonable result, but this needs evidence that the loss actually arose unevenly across the period.
How Group Relief Cuts In First
Where the surrendering company also belongs to a corporate group, standard group relief takes priority. Before consortium relief is worked out, the surrendering company’s available losses are reduced by the maximum group relief that could theoretically be claimed by its fellow group members, whether or not any group claim is actually made.8Legislation.gov.uk. Corporation Tax Act 2010 Part 5 – Section 148
The mirror rule applies on the claimant side. If the claimant is in a group, its available profits for consortium relief purposes are reduced by the group relief its fellow group members could potentially claim against it. Consortium relief picks up only what group relief cannot use. This is where claims often go wrong: companies count all the losses in the pot without deducting the theoretical group relief first.
Using a Link Company
Relief does not have to move only between the consortium company and the member itself. Where the member is part of a corporate group, that member can act as a link company and pass losses on to (or receive them from) its fellow group members’ hands.9HM Revenue & Customs. CTM80555 – Consortia: Group Relief: Claim by Company in Same Group as Consortium Member
The combined claims by the link company and its group are capped at what the link company alone could have claimed, so a group cannot multiply relief beyond the member’s actual ownership proportion. The mechanism matters most when the member itself has no taxable profits to shelter but a subsidiary does.
Carried-Forward Losses Under Part 5A
Since April 2017, consortium relief has extended to carried-forward losses through Part 5A of the Corporation Tax Act 2010. Members can now claim relief against their profits using the consortium company’s losses from earlier years, and vice versa. The Part 5A conditions mirror Part 5, with parallel rules for direct claims and link company claims.10Legislation.gov.uk. Corporation Tax Act 2010 Part 5A
Carried-forward relief is subject to the corporate loss restriction. A company can shelter up to £5 million of profits with carried-forward losses without restriction (the deductions allowance); beyond that, only 50% of remaining profits can be sheltered.11GOV.UK. Work Out and Claim Relief From Corporation Tax Trading Losses The £5 million allowance is shared across the group or consortium, so individual allowances can be much smaller in larger structures.
Part 5A also imposes an additional 50% reduction on the relief where arrangements are in place that prevent the claimant (alone or together with other consortium members) from controlling the surrendering company.
Arrangements That Can Disqualify the Claim
Several anti-avoidance rules can knock consortium relief out. Under section 155 of the Corporation Tax Act 2010, a company is barred from surrendering or claiming consortium relief if arrangements exist that would allow any person (other than the holding company of a 90% subsidiary) to control 75% or more of the votes at a general meeting of the consortium company.12HM Revenue & Customs. CTM80605 – Consortia: Group Relief: Arrangements: Disqualifying Relief The rule catches the possibility of control, not just its exercise.
Section 146A separately targets arrangements that could stop the members from collectively controlling the surrendering company. Where such arrangements are in place during any part of the overlapping period, the relief available on the claim is reduced.13Legislation.gov.uk. Corporation Tax Act 2010 Part 5 – Section 146A
Shareholders’ agreements, option deeds, and side letters all need scrutiny against these provisions before entering the arrangement, not at tax return time. By the point a claim is prepared, the accounting period may already be closed.
Making the Claim
The claimant submits the consortium relief claim as part of its Company Tax Return, on the CT600C supplementary pages for group and consortium relief.14GOV.UK. Supplementary Pages CT600C – Group and Consortium Relief The form calls for the surrendering company’s name and tax reference, its accounting period, and the amount claimed.
Before or at the time the claim goes in, the surrendering company must provide written consent identifying the amount surrendered and the accounting period it relates to, with a copy sent to the HMRC office handling the claimant’s return.15GOV.UK. Corporation Tax – Group and Consortium Relief Keep the detailed ownership proportion calculation (with evidence for each of the four measures), proof that the consortium structure was in place throughout the overlapping period, and the consent letter itself. HMRC can request these during an enquiry.
Time Limit
The deadline for making, amending, or withdrawing a consortium relief claim is one year after the filing date for the claimant’s tax return. Because the filing date is 12 months after the end of the accounting period, that works out to no earlier than two years after the accounting period ends.16HM Revenue & Customs. COTAX Manual COM53110 – Claims and Reliefs: Other Reliefs: Group and Consortium Relief, Time Limit for Claims For an accounting period ending 31 December 2025, the last date to claim is 31 December 2027.
If HMRC opens an enquiry into the claimant’s return, the deadline extends to the later of the standard time limit or 30 days after the enquiry closes — specifically, 30 days after HMRC issues a closure notice, a notice of amendment following the enquiry, or the determination of any appeal against such an amendment, whichever is last. HMRC has discretion to extend the time limit in other circumstances, but grants it sparingly.